FHFA watchdog forecasts 70%–80% staff cut, end to fraud probes

The Federal Housing Finance Agency’s inspector general warns that a planned FY2027 funding reduction could cut its mission-critical workforce by 70%–80%. At best, the FHFA Office of Inspector General says, it would be able to conduct only audits required by statute. The OIG also forecasts that specialized investigations into fraud involving Fannie Mae and Freddie Mac would cease. These are expected consequences described in the report, not confirmed completed changes.

The OIG says the reduction is approximately 64% below the $55 million estimate in the President’s FY2027 budget. Applying that approximate percentage to the $55 million benchmark yields an illustrative reduction of about $35.2 million, leaving roughly $19.8 million. That is a calculation, not a final FY2027 funding amount established by the report.

What the OIG says the funding would change i

The report says the funding provided would also require the OIG to shut down its national criminal-enforcement program and eliminate its Office of Evaluations. It says more meaningful audits and evaluations of FHFA programs would not be possible. The OIG says it discussed the consequences with FHFA, but the discussions did not change the agency’s funding decision; it also notified its oversight committees.

The warning comes as the OIG reports this work for the six months from April 1 through September 30, 2026:

The OIG separately reported $29,480,769 in investigative monetary results for the period: $12,153,876 in criminal restitution and $17,326,893 in criminal fines, special assessments and forfeitures. These are reported results from the six-month period, not estimates of the effects of the proposed funding reduction.

For scale, the OIG reported that Fannie Mae and Freddie Mac together had more than $7.85 trillion in assets as of June 30, 2026. That figure describes the institutions under oversight; it does not measure a loss or other effect caused by the funding warning.

FHFA disputes the records-access account i

In the same report, the OIG says FHFA’s refusal to provide requested records and information about the Enterprises prevented it from publishing three evaluations. FHFA disputes that account. A spokesperson told Reuters that the agency had readily produced information, completed 56 document requests and attended 16 hour-long meetings for three recent reviews.

The report covers April 1 through September 30, 2026, and was signed October 30 by Acting Principal Deputy Inspector General James Hodge. Bloomberg Law reported its publication on November 2. The OIG’s records-access account and its funding forecasts are the watchdog’s statements, not court findings.